Friday, 11 September 2015

Best Sector / Thematic Mutual Funds to Invest for High Risk Investors

Posted by MyInvestmentsPub
Most of you know that the Sector Mutual funds or Thematic Mutual funds are suitable for high risk investors.As the name implies, a sector fund is a mutual fund that invests in a specific sector of the economy, such as Banking, Pharma or Infrastructure etc. These funds invest in a specified sector stocks only. Unlike Equity Diversified Mutual funds, these Sector Mutual funds are less diversified, hence the risk exposure is high comparatively. That is why, many experts suggest these funds to only high risk appetite investors. Some times, because of some national or international reasons, some specified sector funds come into focus and yield highest returns compared to any kind of Mutual funds. We will see which sector funds are more favorable to invest in the coming period.

Most Favorable Sector Mutual Funds to Invest:

1. Infrastructure & Logistics:

Recently Indian Government announced 'Smart City 100' mission. Under these scheme, selected cities would become smart cities by providing better infrastructure and other utilities. Also, the Indian Government is focusing on various developments like 'Make in India', 'Housing scheme for all'. All these factors would boost Infrastructure and Logistics sector in the coming years. So, high risk appetite investors who can invest with time horizon of 2 - 3 years period can invest into Infrastructure sector Mutual fund.

Suggested Infrastructure Sector Mutual funds: 

  • Franklin Build India Fund
  • Canara Robeco Infrastructure Fund

2. Pharma Sector Funds:

Pharma Sector Mutual funds are the most consistent performance sector compared to other sectors. Pharma Sector could be among the best sector in the coming years for its defensive nature. The growth saga would continue in the future as well. High or Medium risk appetite investors with time horizon from 3 - 5 years can invest into this Pharma sector Mutual funds.

Suggested Pharma Sector Mutual funds:

  • SBI Pharma Sector Fund
  • Reliance Pharma Sector fund

3. Banking & Finance Sector Mutual funds:

The current financial atmosphere is very much favorable for Banking and Finance sectors. Lowering Current  Account Deficit (CAD), lowering oil prices and lowering Gold prices are making Inflation rate under control. Chances of further lowering key loan rates by RBI are high in the coming quarters. These factors are favoring to choose Banking sector to benefit more in the coming years. High risk appetite investors whose time horizon is 2 - 3 years can invest into Banking Sector Mutual funds.

Suggested Banking Sector Mutual funds:

  • ICICI Pru Banking and Financial Services Fund
  • Reliance Banking Fund 

4. Technology Sector / IT Sector Mutual Funds:

IT Sector is mainly influenced by International factors, particularly the economic conditions of USA. The recent statistics revealing that US economy is recovering to the expectations. Also, with the weakening of Yuan and Euro currencies, dolor is strengthening. These factors favoring to choose IT Sector Mutual funds in the coming years. Domestic IT market is also improving constantly and would continue for the next few years. High and Medium risk appetite investors with time horizon 3 - 5 years can invest into IT Sector / Technology Sector Mutual funds.

Suggested IT Sector / Technology Sector Mutual funds:

1. ICICI Pru Technology Fund
2. DSP BlackRock Technology Fund

Why I have Chosen These Sectors?

1. Indian Government's focus on Developing 100 Smart Cities by 2022 is a great boost to Infrastructure and Logistics sectors in the coming years.
2. Strengthening of US Dolor favors some sectors like Pharma and IT. These sectors have been witnessing healthy growth and will continue in the future as well.
3. The decreased crude oil prices and gold prices saving a lot of valuable foreign currency and the import bill. This will control the inflation and creating atmosphere to reduce the loan interest rates by RBI. All these are favorable factors to BFSI sector.
4. Various schemes like 'House for All', 'Make in India' would make huge demand for these sector stocks in the future.

Few Points While Investing into Sector Mutual Funds:

1. As Sector Mutual funds are less diversified, the risk exposure is comparatively high. Hence, invest only 5% of your investments into these Sector Mutual funds.
2. Invest only your surplus amount into Sector Mutual funds.
3. As the fluctuations in Sector Mutual funds are more, hence you need a close watch on the performance of these funds.
4. Follow the SIP approach for better returns and to minimize the risk.


High Risk yields High Returns. If you invest prudently into selected sector funds, you will have good chances of yielding highest returns. Follow my tips while investing into these sector mutual funds to maximize your returns and minimize the risk.


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